Property Management Bookkeeping in District of Columbia

Money held for owners in District of Columbia is not your money, and District of Columbia sets its own rules — through state law and the DC Department of Licensing and Consumer Protection-registered licensing regime — on how those funds are held, how often they are reconciled, and what records must exist. We keep the trust ledger reconciled to the bank with owner-level detail behind every balance; whether that satisfies District of Columbia's specific requirement is a determination for you and your attorney, not us.

Security deposits in District of Columbia are a liability, not income. District of Columbia caps a residential deposit at one month's rent, and requires you to return or account for it within 45 days of move-out. That deadline is why the ledger has to be per-tenant rather than one pooled balance — a pooled figure cannot answer "what is owed to this tenant, and by when," which is the only question that matters when a deposit is disputed.

Registering to do business in District of Columbia runs through the DC Department of Licensing and Consumer Protection, with tax accounts through the DC Office of Tax and Revenue and employer accounts through the DC Department of Employment Services. District of Columbia treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

The District of Columbia statewide base rate is 6%. Local rates stack on top and are generally sourced to the delivery address, so the effective rate varies within the state. Getting sourcing right is what keeps the liability account matching what you actually collected.